Monday, April 28, 2008

A note on the politics of food and farming

April 28, 2008, 8:26 am

Clark Stooksbury is right: the question of whether deindustrialized farming practices can be “sustainable on a national scale” is - at this point, anyway - a red herring in the debate over food policy. It’s the subsidies - which benefit globalized agribusiness at the expense of the local and sustainable - that are the chief problem right now; if they go, the market is freed, and we can begin to get a better sense of what it can provide. Whether or not small-scale farming can “replace the present system” is a purely academic question.

In a similar vein, let me express my agreement with Andrew Sullivan on the excellence, and indeed Iglesias Award-worthiness, of this post by David Freddoso:

… today, liberal environmentalists are not the ones pushing ethanol. It’s Agribusiness, all the way. Most reputable liberals believe ethanol to be a big joke — an enormous corporate welfare subsidy with no real benefits and many downsides.

On many issues, Conservatives have more in common with ideological liberals than we do with the business interests that come to Washington looking for a handout. Our goal should be to persuade the Left — to use clear failures we agree on, like ethanol — to demonstrate that Big Business will always come to Washington for handouts until Washington stops giving them altogether. Each new handout is the next ethanol, the next sugar — and once you’ve started giving a handout, it never ends.

This is the kind of thing that needs to be repeated, and repeated, and repeated. The fact that the 2008 Farm Bill includes some $20 million in subsidies of the organic food industry, for example, is something that can easily be pointed to as a positive sign, an example of handouts gone right, the kind of thing that the federal government ought to be doing more of. But organic farming is precisely not - or at least, not always or even usually - sustainable farming, and the federal government’s role in slapping the organic label on anything and everything that meets some set of minimal standards (standards which, by the way, are notoriously expensive for small farmers to meet) has arguably been a step backwards for sustainability. Here, for example, is a bit from the latest issue of Edible East Bay, my local food magazine, about the organic dairy industry:

… while organic milk comes from cows that are required to be free of hormones and antibiotics and fed on grain and grass devoid of pesticides and GMOs, the USDA’s organic standards state only that these cows must be given “access to pasture,” but do not specify how much access. It’s ambiguous enough, argues Cummins, to allow a number of large dairy operations to significantly limit pasture time, instead keeping their herds enclosed for much of the day and feeding them mainly corn and other grains (which cows aren’t naturally meant to eat). More grazing might mean healthier cows, but it also means less milking, Cummins notes, which in turn generates less profit. Large operators often milk their herds up to three times a day. “You can’t milk three times a day and give enough time to pasture,” Cummins says.

Critics of big-dairy organic point to many ways in which the trend is not environmentally sustainable. Problems include the use of fuel for trucking in organic feed and shipping milk across large distances, pollution generated by huge amounts of concentrated waste, and the impact on local agricultural economies and small family farms across the country. A Cornell University study reported that the number of U.S. dairy farms with under 100 cows decreased by almost 50 percent from 1991 to 2000. It’s all a casualty, Cummins argues, of a corporate agricultural system that has rapidly infiltrated the booming organic industry, one that is profit-driven and run by publicly traded companies beholden foremost to their shareholders.

The nation’s two largest organic mega-dairy operators are Horizon and Aurora, both started by corporate-organic pioneer Mark Retzloff. While Horizon draws raw milk from a number of farms, its main dairy is located in the western desert of southern Idaho, where little grass grows and several thousand cows “graze” in an enclosed dry lot. Horizon is the nation’s largest organic dairy brand and in 1998 became the first publicly traded organic food company in the country. The younger Aurora, which brought in over $100 million in sales last year, operates five dairies in mostly arid regions of Colorado and Texas and has its own processing facilities. The nation’s leading private-label organic milk producer, it supplies organic dairy products to Safeway, Costco, and WalMart under their own respective brand names.

Cummins says neither company provides its herds with adequate pasture time, and their animals are not always raised organically from birth. “It’s no better to buy bogus organic milk produced on a factory farm than it is local, [conventional] milk,” he says.

It’s eminently questionable, of course, whether being “driven by profits” is really the source of our troubles - Mark McAfee’s Organic Pastures raw milk dairy, which I profile in my Doublethink piece, is a multi-million-dollar operation replete with its own airstrip, and McAfee has actively courted the fortunes of venture capitalists. It’s also very much a place where quality matters, but what McAfee has realized is that - so long as government will leave him the hell alone - he can make millions of dollars by producing a high-quality product and selling it to the small but growing segment of the population willing to pay top dollar for it. Is this an approach that’s going to be able to provide milk to the entire U.S.? Of course not, but that doesn’t mean that government needs to be in the business of propping up his competition.

The crucial point, though, is that that $20 million that will be spent on the Organic Agriculture Research and Extension Initiative will be going, not to the small, innovative farmers who produce a variety of seasonal crops and sell them locally through farm markets, CSAs, roadside stands, and small groceries, but rather to

… administer competitive research grants, largely through USDA’s Cooperative State Research, Education, and Extension Service. Research is to focus on determining desirable traits for organic commodities; identifying marketing and policy constraints on the expansion of organic agriculture; and conducting advanced research on organic farms, including production, marketing, and socioeconomic research.

Other research and extension provisions for organic agriculture that are authorized, but not mandated, include data development on organic agricultural production and marketing; facilitated access to organic research conducted outside the United States for research and extension professionals, farmers, and others; and a mandated report on the need for additional funding for research and promotion of organic agricultural products.

… and so on. That’s to say, such federal monies will benefit the Mark Retzloffs of the world much more than the Joel Salatins or even the Mark McAfees. And this is arguably the case with organic “certification” more generally: it works in favor of those large-scale, industrial producers who can find ways to come into minimal compliance with the guidelines, and very much against those who try to go above and beyond them. Everyone gets the same label, consumers are freed from the sense that they ought perhaps to do some work to figure out where their food is coming from and how it is produced, and the race goes to the compliant rather than the creative.

It should go without saying that it will be quite a different story if the large-scale producers end up succeeding, as they surely would, in cornering a large share of a free - that is to say unsubsidized, choice-maximizing, and only very minimally regulated - market. The same goes if BP wants to give my university billions of dollars in research on biofuels: if it’s potentially profitable, they should be encouraged to give it a go, but to the extent that their investment was motivated by the promise of federal subsidies, it represents a failure of scientific innovation rather than a success. We’ll never find out what is and isn’t sustainable until we stop piling free manure on the latest industries of choice.

"Nationwide, farmers markets and other local-food institutions, for all their vibrancy, generally remain niche operations catering to a relatively tiny portion of the population. The Kellogg Foundation (no longer related to the industrial-food giant famous for its corn flakes) reckons that nationwide, just 2 percent of food consumed truly qualifies as sustainable.

One reason: although the farmers market model works well for farms small enough to sell all or most of their produce directly to consumers, it makes only limited economic sense for mid-sized family farms. And it's precisely these mid-sized farms that could ramp up local and regional food chains to a point where they supply a large part of the American diet.

Middle of the Story

So why isn't that happening?

It's not for lack of numbers. According to a 2007 USDA study, the U.S. now houses just under a million "working farms" -- that is, farms generating at least $10,000 in annual revenue. And mid-sized farms -- those with annual revenues between $50,000 and $250,000 -- represent fully a third of that total. In fact, they outnumber large farms (those bringing in more than $250,000) by about two to one.

The problem, rather, is market structure. In the United States today, there are essentially two marketing channels for farms. You can sell your produce directly to consumers, through farmers markets and CSAs; or you can sell it to gigantic corporate buyers that have tremendous leverage to set price. The former model works well enough for small farms; the latter works best for large operations tightly focused on one or two crops -- mostly corn and soy.

In that light, it's not surprising that spaces like Carrboro Market brim with the bounty of small farms, and our supermarket shelves groan with goods that amount to clver combinations of processed corn and soy. As a group of agriculture scholars led by Fred Kirschenmann wrote in a seminal paper called "Why Worry about Agriculture of the Middle?" mid-sized farms get squeezed in this arrangement. They are "too small to compete in highly consolidated commodity markets, and too large ... to sell in direct markets."

As a result, they operate under severe pressure. The above-linked USDA document tells a grim story. Despite the fact that mid-sized farms make up a third of working farms at present, we are losing them at a rate of more than 10 percent every five years. Meanwhile, the number of large and mega-farms is growing robustly.

Between 1997 and 2003, for example, 10.9 percent of farms with revenues between $50,000 and $99,000 closed their barn doors, as did 11.2 percent of farms bringing in between $100,000 and $249,000. Over the same period, the ranks of mega-farms with revenue exceeding $5 million swelled by 42 percent.

Another USDA study, this one from 2006, illustrates the obliteration of mid-sized farms in stark economic terms. On average, farms with revenues between $100,000 and $249,000 have an operating profit margin of negative 1.8 percent. Their operations lose money or make very little, and they augment family income with off-farm work. By contrast, farms that do between a quarter and a half million in business have operating profit margins of 10 percent, and farms with revenue of more than a half million have an average margin of 16 percent.

These large-scale farms don't respond to the needs of their surrounding communities; to remain profitable, they toe the line laid down by the huge multinational food conglomerates that buy their crops. Mid-sized farms could fill the void between the farmers market and the grocery section of Wal-Mart at the local and regional level, but right now, the marketing infrastructure needed to move their goods to nearby consumers doesn't exist.

As Kirschenmann et al put it, huge buyers of farm goods like Wal-Mart, Archer Daniels Midland, and to a large degree even Whole Foods have serious incentives to deal with only the largest farms. It simply costs less "to contract with one farmer who raises 10,000 hogs than ten farmers who raise 1,000 hogs," they write.

Thus to break the stranglehold of industrial food over the American diet, we need to find new ways to connect consumers with mid-sized farmers. The infrastructure for doing so -- locally owned grocery stores, dairy-processing plants, slaughterhouses, canneries -- has withered away as the food industry consolidated over the decades. And farmers themselves, with their razor-thin if not negative profit margins, don't have the resources to make those investments. Closing the gap between mid-sized farmers and their nearby communities counts, I think, as the major challenge of the sustainable-food movement going forward.

So far, the most promising efforts to meet that challenge have come at the local level. Last fall, I wrote about one such effort in Woodbury County, Iowa. There, farmers and consumers have worked hard to raise money to create a farmer-owned restaurant, processing center, distribution business, and grocery store -- explicitly to give the area's remaining mid-sized farms a viable market other than the one for corn and soy. All over the country, similar initiatives are bubbling up, and I'll continue highlighting them.

"If present trends continue, mid-sized farms, along with the social and environmental benefits they provide, will likely disappear in the next decade," Kirschenmann and his associates wrote several years ago. Since then, with the rise of the biofuel boom and the jump in corn and soy prices, those trends have intensified. As go mid-sized farms, so likely go the prospects for any real challenge to the myriad ravages of industrial food.

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